The Asset Value Thread
Discussion
Been keeping an eye on the sale value of cars and houses for a while.
Seems to me that people have been paying far too much for used cars, especially for those with heritage/emotional significance/provenance etc, even though they're an easily movable asset with no capital gains tax etc.
I've seen the (over-inflated) classic car market tank (or correct) in the past, so do expect the same thing to happen again as a trickle-down of a general trend. I've been wrong many times in the past though
However would be good to know and monitor people's opinions and experiences of this, and other classes of assets, and what any predictions may be.
Seems to me that people have been paying far too much for used cars, especially for those with heritage/emotional significance/provenance etc, even though they're an easily movable asset with no capital gains tax etc.
I've seen the (over-inflated) classic car market tank (or correct) in the past, so do expect the same thing to happen again as a trickle-down of a general trend. I've been wrong many times in the past though
However would be good to know and monitor people's opinions and experiences of this, and other classes of assets, and what any predictions may be.
The classic car market has been slowing for a year or so now, prices have been slowly dropping from the highs of past. Obviously this does not apply to certain cars of major significance and rarity.
Vintage pre 1930’s stuff is more difficult to sell as the market becomes ever more niche.
The Cossies and Deltas such like have peaked imo. And this is only my opinion based upon little more than casual interest over the years.
Vintage pre 1930’s stuff is more difficult to sell as the market becomes ever more niche.
The Cossies and Deltas such like have peaked imo. And this is only my opinion based upon little more than casual interest over the years.
Take a look here..
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Personally I can't see a 'correction' in prices for classic cars, watches or any other physical asset until interest rates start to rise.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Personally I can't see a 'correction' in prices for classic cars, watches or any other physical asset until interest rates start to rise.
Personally I think the market will always soften at some point but an actual "crash" - I doubt it. Is a £100k classic suddenly going to be worth £10k again. Not a chance. Would it be worth £50k... maybe. I think prices have come down about 20% now, decent cars still sell and it just means buyers can be a bit more picky and sellers need to be a bit more realistic.
But values will always peak then fall, then rise again to a new peak then fall again.
Does everyone suddenly panic their pension lost 30% of its value. No. Life goes on.
Property is exactly the same, so long as you are not forced to sell at a specific time (i.e due to redundancy or going bankrupt) then who cares if prices fall 30, 50%, whatever.
Houses have never been cheaper in the long run in modern history. If you buy a house and look at its value over a long period of time its always going up. But then you need to have a house, you cant really live in a car.
IYSWIM.
But values will always peak then fall, then rise again to a new peak then fall again.
Does everyone suddenly panic their pension lost 30% of its value. No. Life goes on.
Property is exactly the same, so long as you are not forced to sell at a specific time (i.e due to redundancy or going bankrupt) then who cares if prices fall 30, 50%, whatever.
Houses have never been cheaper in the long run in modern history. If you buy a house and look at its value over a long period of time its always going up. But then you need to have a house, you cant really live in a car.
IYSWIM.
Thanks for the feedback chaps.
red_slr said:
Houses have never been cheaper in the long run in modern history. If you buy a house and look at its value over a long period of time its always going up. But then you need to have a house, you cant really live in a car.
IYSWIM.
Red Sir, not so sure about that. Based anecdotally without any data whatsoever, I'd have thought that housing is relatively unaffordable now, and likely to be more so as and when higher interest rates kick in. I could be wrong though!IYSWIM.
The asset boom seemingly started as a result of economic conditions after the 2008 financial crisis.
It resulted in a number of banks folding and more importantly interest rates being dropped in order to get the public to spend.
With interest rates at historic lows it means money in the bank is losing its value over time (in comparison to inflation).
So people with any savings started to think about how they could put their money in other places, given that the safety of a bank was not guaranteed (only up to values of £85k), and also to place money where they wouldn't get stung by taxes.
So people turned to assets, creating the "asset boom".
With interest rates historically low, this also generated an alternative attractive method of paying for things. This being on credit. People signing up to low rate mortgages, low rate finance packages etc. , which enabled people en mass to rent things that they couldn't buy outright, but rent at an 'affordable' monthly rate.
With such demand influx on to assets the asking prices rose dramatically.
Housing in London and in many other parts of the UK rose fast, 2nd hand cars with any sort of 'uniqueness' or 'limited number' became very desirable and viewed as an 'investment'. People were even queuing up to buy brand new limited number cars of the production line knowing that the pressure on the 2nd hand re-sale market was forcing the prices sky high.
So the fundamental reason, as I see it, is the low interest rates. Enabling people to rent what they wouldn't otherwise be able to afford, and also a forcing factor against savers, knowing their money was losing value in the bank.
With interest rates still low, I think we've seen asking prices reach their max. although there isn't much in the way of forcings to push prices low. For that to happen demand has to drop off - or people able to buy similar assets for much cheaper elsewhere. (Hard to do for housing of course, but could affect cars if the pound rallies significantly against other currencies, and depending on future trade deals etc. of course).
Asset prices have adjusted to the point where renting/finance stretches people to their max. comfortability on monthly repayments.
It resulted in a number of banks folding and more importantly interest rates being dropped in order to get the public to spend.
With interest rates at historic lows it means money in the bank is losing its value over time (in comparison to inflation).
So people with any savings started to think about how they could put their money in other places, given that the safety of a bank was not guaranteed (only up to values of £85k), and also to place money where they wouldn't get stung by taxes.
So people turned to assets, creating the "asset boom".
With interest rates historically low, this also generated an alternative attractive method of paying for things. This being on credit. People signing up to low rate mortgages, low rate finance packages etc. , which enabled people en mass to rent things that they couldn't buy outright, but rent at an 'affordable' monthly rate.
With such demand influx on to assets the asking prices rose dramatically.
Housing in London and in many other parts of the UK rose fast, 2nd hand cars with any sort of 'uniqueness' or 'limited number' became very desirable and viewed as an 'investment'. People were even queuing up to buy brand new limited number cars of the production line knowing that the pressure on the 2nd hand re-sale market was forcing the prices sky high.
So the fundamental reason, as I see it, is the low interest rates. Enabling people to rent what they wouldn't otherwise be able to afford, and also a forcing factor against savers, knowing their money was losing value in the bank.
With interest rates still low, I think we've seen asking prices reach their max. although there isn't much in the way of forcings to push prices low. For that to happen demand has to drop off - or people able to buy similar assets for much cheaper elsewhere. (Hard to do for housing of course, but could affect cars if the pound rallies significantly against other currencies, and depending on future trade deals etc. of course).
Asset prices have adjusted to the point where renting/finance stretches people to their max. comfortability on monthly repayments.
Just to add to this, I think its fair to say that asset prices recently were pushing to bursting point, but the pressure is now slowly being released.
I am wondering if this "release of pressure" will be long enough or strong enough to see a decent reversal of the bubble?
I don't think its a type of bubble that will pop because there is always a decent demand for assets in the UK (and from global investors), but if there is a momentum that builds with people looking to sell their assets due to fears of losing the 'investment', then this could be a decent forcing to see significantly lower prices in the coming years.
I do think however that the majority of consumers are now "fully loaded" on monthly repayment finance packages and mortgages, up and down the country. And this is also a factor in drying up the price increases of assets.
I've noticed many 2nd hand performance car prices are now on the decline, after years of rising. This will have knock on effects all the way up and down the rungs of the affordability ladder. Similarly with many places in the UK housing market. The pressure release here however is in part due to the large influx of new build housing.
I'm not an expert in these fields so please feel free to disagree with anything I've written in these recent posts.
I'm more or less commenting from recent experience of buying and selling some 2nd hand performance cars and also purchasing a house a few years ago and keeping an eye on the market to move again in the upcoming few years.
I am wondering if this "release of pressure" will be long enough or strong enough to see a decent reversal of the bubble?
I don't think its a type of bubble that will pop because there is always a decent demand for assets in the UK (and from global investors), but if there is a momentum that builds with people looking to sell their assets due to fears of losing the 'investment', then this could be a decent forcing to see significantly lower prices in the coming years.
I do think however that the majority of consumers are now "fully loaded" on monthly repayment finance packages and mortgages, up and down the country. And this is also a factor in drying up the price increases of assets.
I've noticed many 2nd hand performance car prices are now on the decline, after years of rising. This will have knock on effects all the way up and down the rungs of the affordability ladder. Similarly with many places in the UK housing market. The pressure release here however is in part due to the large influx of new build housing.
I'm not an expert in these fields so please feel free to disagree with anything I've written in these recent posts.
I'm more or less commenting from recent experience of buying and selling some 2nd hand performance cars and also purchasing a house a few years ago and keeping an eye on the market to move again in the upcoming few years.
red_slr said:
I think you misread - or I typed it ambiguously.
I say they have never been cheaper, meaning they are only getting more expensive.
I am not talking about affordable, btw.
The price only ever goes up. So we are agreeing I guess.
In Japan house prices are still lower than the late 1980’s. I say they have never been cheaper, meaning they are only getting more expensive.
I am not talking about affordable, btw.
The price only ever goes up. So we are agreeing I guess.
wisbech said:
red_slr said:
I think you misread - or I typed it ambiguously.
I say they have never been cheaper, meaning they are only getting more expensive.
I am not talking about affordable, btw.
The price only ever goes up. So we are agreeing I guess.
In Japan house prices are still lower than the late 1980’s. I say they have never been cheaper, meaning they are only getting more expensive.
I am not talking about affordable, btw.
The price only ever goes up. So we are agreeing I guess.
(a friend of mine lives there)
red_slr said:
In Japan they give houses away, for free. Or in some cases they pay you to live in them.
(a friend of mine lives there)
Yep, houses (the actual building) depreciate to pretty much zero in Japan, normally a 30-40 year period. The land value is still lower than it was 30 years ago though(a friend of mine lives there)
So, property prices don’t always go up.
Edited by wisbech on Friday 17th January 10:03
wisbech said:
red_slr said:
In Japan they give houses away, for free. Or in some cases they pay you to live in them.
(a friend of mine lives there)
Yep, houses (the actual building) depreciate to pretty much zero in Japan, normally a 30-40 year period. The land value is still lower than it was 30 years ago though(a friend of mine lives there)
So, property prices don’t always go up.
Edited by wisbech on Friday 17th January 10:03
red_slr said:
Personally I think the market will always soften at some point but an actual "crash" - I doubt it. Is a £100k classic suddenly going to be worth £10k again. Not a chance.
It happened in the late 80s. It'll happen again. It might be milder. It might not. And if anyone says 'it's different this time' then we all know how that ends.
ZeroGroundZero said:
Just to add to this, I think its fair to say that asset prices recently were pushing to bursting point, but the pressure is now slowly being released.
I am wondering if this "release of pressure" will be long enough or strong enough to see a decent reversal of the bubble?
I don't think its a type of bubble that will pop because there is always a decent demand for assets in the UK (and from global investors), but if there is a momentum that builds with people looking to sell their assets due to fears of losing the 'investment', then this could be a decent forcing to see significantly lower prices in the coming years.
I do think however that the majority of consumers are now "fully loaded" on monthly repayment finance packages and mortgages, up and down the country. And this is also a factor in drying up the price increases of assets.
I've noticed many 2nd hand performance car prices are now on the decline, after years of rising. This will have knock on effects all the way up and down the rungs of the affordability ladder. Similarly with many places in the UK housing market. The pressure release here however is in part due to the large influx of new build housing.
I'm not an expert in these fields so please feel free to disagree with anything I've written in these recent posts.
I'm more or less commenting from recent experience of buying and selling some 2nd hand performance cars and also purchasing a house a few years ago and keeping an eye on the market to move again in the upcoming few years.
Used performance cars and UK housing are two VERY different markets.I am wondering if this "release of pressure" will be long enough or strong enough to see a decent reversal of the bubble?
I don't think its a type of bubble that will pop because there is always a decent demand for assets in the UK (and from global investors), but if there is a momentum that builds with people looking to sell their assets due to fears of losing the 'investment', then this could be a decent forcing to see significantly lower prices in the coming years.
I do think however that the majority of consumers are now "fully loaded" on monthly repayment finance packages and mortgages, up and down the country. And this is also a factor in drying up the price increases of assets.
I've noticed many 2nd hand performance car prices are now on the decline, after years of rising. This will have knock on effects all the way up and down the rungs of the affordability ladder. Similarly with many places in the UK housing market. The pressure release here however is in part due to the large influx of new build housing.
I'm not an expert in these fields so please feel free to disagree with anything I've written in these recent posts.
I'm more or less commenting from recent experience of buying and selling some 2nd hand performance cars and also purchasing a house a few years ago and keeping an eye on the market to move again in the upcoming few years.
I wouldn't group them at all when referring to asset value movement.
ZeroGroundZero said:
oyster said:
Used performance cars and UK housing are two VERY different markets.
I wouldn't group them at all when referring to asset value movement.
Agree totally.I wouldn't group them at all when referring to asset value movement.
I was just using my recent experience of those particular asset types to form a discussion opinion.
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